Marathon Digital's Stock Promises High Growth Potential, Analyst Suggests

A BTIG analyst has highlighted a significant growth potential in Marathon Digital Holdings Inc.'s stock, suggesting a 50% upside. Despite a recent dip in share price, catalyzed by the emergence of spot bitcoin ETFs, Marathon Digital MARA has caught the analyst's bullish attention.

Decline in Marathon Shares

The series of declines for Marathon Digital's shares coincides with the initiation of spot bitcoin ETFs, potentially diverting investments away from bitcoin mining firms. Marathon Digital's shares have seen a drop of about 30% since early January. However, amid these declines, BTIG analyst Gregory Lewis has upgraded Marathon's rating from neutral to buy, indicating a belief in the company’s bright future.

Transaction Fees and Operational Shift

Marathon Digital may reap benefits from the growing bitcoin transaction fees as bitcoin prices fluctuate. Lewis notes that Marathon could potentially validate approximately 1,400 bitcoin a month due to its significant share of the global hash rate. While acknowledging the volatility of fee revenue, he emphasizes its historic correlation with the bitcoin price and overall adoption.

Moreover, Marathon's recent strategic move to acquire two bitcoin mining sites has increased its operational capacity to 390 megawatts. This acquisition positions the company with a total of about 910 megawatts of mining capacity, shifting its strategy from using hosted infrastructure to becoming an infrastructure owner-operator.

Such a shift is expected to give Marathon better control over its power costs in the long term, further solidifying the company's position in the market. Marathon's venture into infrastructure ownership marks an optimistic turn in its business model.

Price Target for Marathon Shares

With the current share price at $17.90, Lewis has set a bold price target of $27 for Marathon Digital. This ambitious target suggests an approximate 50% upside, indicating a strong confidence in the future performance of the company's shares.

Analyst, Bitcoin, ETF